How Companies Can Identify Racial and Gender Bias in Their Customer Service

Executive Summary

Research shows that minority customers — blacks and Asians — regularly receive worse customer service than whites in ways that are not immediately obvious to onlookers (or even managers). These results prompt a couple of questions for executives and managers. One, does your company hire individuals to interface with customers? Most likely, the answer is “yes.” Two, do you know if your employees are treating all customers equally? The answer here is probably “no.” This is, in part, because many aspects of customer service are intangible, nuanced, and difficult to observe. A well-designed internal audit can help you understand exactly how your employees are treating customers, and can help you formulate changes to implement.

These two incidents may seem extreme. However, our research suggests that they are manifestations of a much more prevalent phenomenon. In one set of studies, currently in working paper format, we found that minority customers — blacks and Asians — regularly receive worse customer service than whites in ways that are not immediately obvious to onlookers (or even managers). Specifically, we audited 6,000 hotels in the U.S. by sending email inquiries from fictitious email accounts that signaled senders’ race and gender. By systematically examining replies to these inquiries, we observed that frontline employees were less responsive to nonwhite customers and objectively less helpful and friendly. In other words, compared to white customers, black and Asian customers received worse quality service.

These results prompt a couple of questions for executives and managers. One, does your company hire individuals to interface with customers? Most likely, the answer is “yes.” Two, do you know if your employees are treating all customers equally? The answer here is probably “no.” This is, in part, because many aspects of customer service are intangible, nuanced, and difficult to observe. For instance, do your employees smile more when interacting with women than men? Or are they more polite when handling complaints from white customers than they are complaints from black customers? It is possible that hundreds and thousands of interactions — in person, online, over the phone — occur between your employees and your customers each day. Given the nature of customer service, whether or not your frontline workers are treating customers equally will likely be invisible to casual observation.

On May 29, Starbucks will be closing all of its stores for its employees to receive a racial bias training. While certainly a positive step forward, we encourage firms to go even deeper — by conducting regular audits and implementing structural changes. Internal audits are a way to understand what is really happening at the frontlines of your company, and where pain points might exist. Conducting an audit study may seem simple, and many companies do similar things already. But conducting a good audit study requires time and attention and should be tailored to your industry, customer touchpoints, and strategic plan.

For instance, if you are a brick-and-mortar retailer interested in assessing the quality of service provided by your salespeople, you may consider sending in a variety of mystery shoppers. If you are an e-commerce company with representatives who field questions from customers via email, you may consider submitting inquiries from individuals with different names (much like what we did in our own research). Below, we present a general roadmap for companies interested in ensuring that their frontline workers deliver not only high quality, but also consistent, service to a diverse range of customers.

Map employee-customer touchpoints. Does your company have call centers dedicated to handling customer complaints? What about an online chat service for questions? Identifying the range of possible employee-customer touchpoints is the first step in this process. Differential service treatment can occur in the most unexpected places — in the tone of an employee’s voice, in how emails are written in response to inquiries, etc. — and so mapping the different ways your employees engage with customers will allow you first to see all potential gaps in service and then to identify high priority interfaces in need of an audit.

Identify key comparison groups. Once you have determined your key touchpoints, determine which groups you would like to compare in your audit. Who are your typical customers? After you have identified your primary customer base, think outside the box. Who would atypical customers be? Develop a list of unlikely customers and now imagine that these customers did try to procure your services.

For instance, if you cater to fans of death metal music, every stereotype would inform you — and your employees — that an elderly Indian woman is unlikely to be a customer. But, suppose that such an individual did try to shop at your company (and they might, if you select such a person to be a mystery shopper). How would your employees behave toward her? Would they treat her the same way they would a white male in his 20s? Choosing comparison groups in a deliberate way — e.g., a young white male versus an elderly Indian woman — can help answer these questions. In the absence of comparison groups, it is impossible to know whether employees are (unintentionally) alienating certain customer groups.

Define the objectives. What are you measuring? One of the main challenges of assessing the quality of customer service is that service is often intangible and difficult to quantify. For this reason, clearly define the behaviors you are testing. For instance, in our research, which we conducted over email, we measured specific phrases, common questions, and greetings that frontline workers use with customers. A well-designed audit will key in on specific behaviors that you hope frontline workers will use. With in-person interactions, you could measure employees’ body language; over email you might analyze whether workers sign off with a complimentary close; on the phone you could track the tone of employees’ voices or length of time they spend on the call. What is most important is that you delineate clear, measurable behaviors that reflect the service you want your employees to deliver.

Eliminate factors that could confound the audit’s results. A well-designed audit should ensure that both participants (i.e., frontline workers) and auditors are free from subtle biases that may taint its results. When auditing frontline workers, it is important to conceal any trace of the investigation. Specifically, you must blind them to the fact that you are testing for discrimination in service — or better yet, to the fact that they are being audited at all. At the same time, when choosing auditors, it is important to verify that they do not have a personal stake in the audit’s results. This can be easily solved by using a group of individuals who are in different departments — or better yet, bringing in external consultants.

What happens after conducting an audit? It’s time to implement changes based on the key pain points you have identified at the company. Even though evidence on their efficacy is mixed at best, it may be tempting to turn to racial bias trainings. But, if you have identified possible problems through your audit, the most effective way to remedy these problems is to make structural changes. For this, we recommend a four-pronged approach:

First, develop what we refer to as anticipatory service protocols. Standardize scripts and develop rules. Do you have a product that you want to promote? Work with your frontline employees to craft stories about the products that are broadly accessible to different customers. Do you need to limit the Wi-Fi access for people using your services? Make sure employees know that the rules apply equally to everyone — that they cannot simply decide to give preferential treatment to certain customers — and reward employees who adhere to them. Standardizing employee-customer interactions can limit employee discretion and any bias that may seep into their responses.

Second, develop channels for employee feedback. After you have put protocols in place, it is likely new issues will arise as employees interact with customers. For this reason, develop channels through which employees can surface these issues. You could create a taskforce dedicated to designing and improving protocols, for example, and make it easy for employees to contact members of the team via text. You could also start a Facebook group that allows employees to share tips and advice with one another. Customer needs can evolve and shift; developing forums through which employees can pose questions and receive answers will help you stay abreast of these changing needs.

Third, emphasize not just “best” service but “equal” service. Companies often pride themselves on providing high quality customer service. But this type of mindset could predispose frontline workers to provide the “best” service selectively, since always providing the best service possible may be onerous and subject to interpretation. For this reason, we encourage firms to link best service with equal, consistent service in messaging to frontline workers. Simply raising awareness of these values could prompt employees to alter their behaviors.

Fourth, diversify employees’ experiences. This can be achieved through hiring and employee rotations. At the point of hire, make sure that the people you bring in represent a broad range of backgrounds and experiences. Having a diverse employee base can help you increase trust and empathy with the people you wish to serve. Of course, many companies are still working to hire and retain a diverse pool of employees. But there are other ways to ensure your employees have contact with many different customers, which can help reduce bias. Rotating workers across locations or regions may not only connect members of your workforce, but it can also broaden your workers’ ideas about who a “typical” customer is.

After making one or more of these structural changes, it is time to assess their impact. Try conducting another audit to determine whether or not more adjustments are necessary. Importantly, just because an internal audit returns no evidence of discrimination does not mean you should stop running audits. Undertaking audits on an ongoing basis is critical to detecting and then reducing discrimination in customer service.

Conducting an internal audit may seem like a lot of work, and it is potentially daunting to consider the breadth of what you might uncover. But by preempting employee behaviors that could exclude or marginalize certain customer groups, you can foster both excellent and equal customer service.

Alexandra C. Feldberg is a doctoral candidate in the Organizational Behavior PhD program, jointly offered between Harvard Business School’s Organizational Behavior Unit and Harvard University’s sociology department. Her research focuses on diversity, gender, and knowledge in organizations.

Tami Kim is an assistant professor of marketing at Darden School of Business, University of Virginia. Her research focuses on implicit social contracts in the digital age.